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Reading 12: Technical Analysis - LOS a ~ Q7-10

Q7. A basic assumption of technical analysis in contrast to fundamental analysis is that:

A)   a stock's market price will approach its intrinsic value over time.

B)   aggregate supply of and demand for goods and services are key determinants of stock value.

C)   security prices move in patterns, which repeat over long periods.

Q8. According to a technician, stock prices tend to move:

A)   in an advance-decline series.

B)   in trends that persist.

C)   randomly.

Q9. Which of the following is NOT a basic assumption of technical analysis?

A)   Liquidity is provided by securities dealers.

B)   Security price trends persist for long periods of time.

C)   Market prices are set by supply and demand forces.

Q10. A technical analyst believes stock prices are primarily driven by:

A)   specialist trading.

B)   market supply and demand forces.

C)   the random walk hypothesis.

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